Qualys, Inc.

Good day and thank you for standing by. Welcome to the Qualys third quarter 2023 investor conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star one one on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your speaker today, Mr. Blair King. Sir, please go ahead.

Thank you, Chris. Good afternoon, and welcome, everyone, to our Qualys' third quarter 2023 earnings call. Joining me today to discuss our results are Sumitakar, President and CEO, and Jumi Kammer, CFO. Before we get started, I would like to remind you that our remarks today will include forward-looking statements that generally relate to future events or future financial or operating performance. Actual results may differ materially from these statements. The factors that could cause results to differ materially are set forth in today's press release and our filings with the SEC, including our latest Form 10-Q and 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today And we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. The reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. And as a reminder, the press release prepared remarks and investor presentation are all available on the investor relations section of our website. So with that, I'd like to turn the call now over to Sumit.

Thank you, Blair, and welcome to our third quarter earnings call. In Q3, we continue to deliver strong financial results, reflecting our ongoing commitment to rapid innovation and customer success. We experienced another quarter of steady VMDR adoption, which is now deployed by 54% of our customers worldwide. Key competitive VMDR wins in Q3 include a leading multinational conglomerate, several global financial services, technology, and manufacturing companies, a large government agency, and multiple new and other existing customers, both down market and in the global 2000. Adding to these wins, I will take a moment to share a couple of examples of how our customers and partners are expanding their use of Qualys' capabilities to further consolidate their security stats. On the customer front, a Fortune 100 biotech company was overwhelmed by the number of security tools it deployed and needed a solution to not only provide better security outcomes, but also consume fewer point products, agents, and resources through a unified dashboard. In a mid six-figure booking upsell, this customer who already deployed cybersecurity asset management with external attack surface management and VMDR, expanded its use of VMDR with TrueRisk to over 290,000 assets while adding our web application scanning, patch management, and total cloud CNAP solutions. In doing so, this customer consolidated three competing vendors across on-prem cloud and multi-cloud environments through an organically integrated platform. With our innovative technologies, unmatched platform effect and focus, reducing our focus on reducing risk and friction. This win underscored Qualys' ability to eclipse siloed solutions and advance our leadership in the industry. Specifically highlighting the momentum we're seeing with our TotalCloud CNAP solution in a highly strategic and competitive mid-six-figure booking cross-sell, a Forbes 200 existing VMDR and patch management customer selected TotalCloud to scale their container deployments in over 50,000 assets, monitoring millions of containers' images daily. Through its evaluation of competing cloud security providers, this customer determined that alternative point solutions added complexity to their operations, lacked integration and missed detections, which hindered their ability to assess risk and consolidate the security tools. Today, through a highly scalable natively integrated CNAP solution, the Qualys cloud platform provides complete visibility of this customer's attack surface with advanced AI ML technologies to uniquely detect zero-day malware while prioritizing and remediating risk at scale in real time. Our early wins in cloud and container environments are a testament to the extensibility of the Qualys cloud platform, its unified dashboard, and our adaptive subscription model. Today, we have over 31 million agents already supporting workloads in the cloud. Qualys is well armed with organically integrated total cloud CNAP solution that unifies cloud workload protection, cloud security posture management, CSPM, cloud detection and response, infrastructure as code, and container security. Powered by AI threat detection and insight, Total Cloud was recognized by Kaplinger Cole as a strong technology leader in cloud security, ahead of several competing modern cloud point solutions and next-gen platforms. I'm quite pleased by the early momentum we are experiencing in the market with our Total Cloud and increasingly encouraging customer feedback. Additionally, new customers continue to adopt cybersecurity asset management with external attack surface management and patch management alongside VMDR right out of the gate. We believe this further highlights Qualys' ability to help customers not only detect but also quantify, prioritize, and remediate risk across all environments much faster than alternate siloed solutions. On the partner front, in Q3, we continue to advance our evolving ecosystem with two leading global managed service providers, which also expanded their offerings beyond VMDR to include our cybersecurity asset management and patch management capabilities. These partners have indicated they chose Qualys over competing solutions due to the ease of orchestration, natively integrated platform, and single agent approach to simplify their operations and significantly reduce remediation times for their customers. In addition, we expanded our relationship with another leading cloud provider, which is now taking the Qualys cloud platform available in its marketplace. With wins such as this one, I've shared today customers spending 500,000 or more with us in Q3 grew 15% from a year ago to 174. With more and more customers beginning to perceive Qualys as a leading risk management platform that consolidates multiple security point solutions across all environments, we remain confident in our ability to drive long-term growth and gain market share. especially in light of the recent IDC study highlighting a 403% ROI for customers choosing to partner Qualys with a platform approach. As I have said before, a cornerstone of our strategy is engineering innovation, and with a customer-first, product-led growth focus, we challenge ourselves every day to lead the industry. Executing against this agenda, we will unveil our new platform approach at our upcoming Qualys Security Conference in Orlando from November 6th to November 9th. This new approach will seamlessly integrate any number of third-party security tools into Qualys Cloud Platform. Regardless of the variety of vendors utilized within an organization's infrastructure, Qualys will soon harness automated insights into critical areas of risk spanning on-prem cloud and multi-cloud assets to uniquely enable comprehensive remediation-wise risk posture assessment with new groundbreaking remediation capabilities. At this conference, our product and engineering teams will further showcase additional innovations on the cloud platform, including our advancements in delivering ML and AI-based predictive insights, first-party vulnerability and misconfiguration detection and response, the integration of software supply chain security into continuous integration and delivery, CI-CD pipelines, and more. you can hear our customers speak firsthand about how our continuous innovation on the platform enables organization simultaneously reduce complexity and risk in their environment as they standardize our trusted platform that delivers an immediate ROI and lower total cost of ownership relative to siloed traditional detection only technologies. We have over 900 people registered to attend and look forward to seeing many of you there. In summary, We are delivering strong profitability and cash flow while building business momentum in both our core and cloud expansion markets as companies uniformly recognize security transformation is fundamental to combating today's heightened threat and regulatory environment. As a result, customers are increasingly looking to reduce their risk exposure through the adoption of integrated risk management platforms spanning all environment instead of deploying a collection of disparate point solutions for different environments and hiring more people to manage those. We believe that our organically integrated cloud-native platform built to solve modern security challenges, Qualys is laying a foundation for future growth and well-positioned to drive long-term shareholder value with a balanced approach to growth and profitability. With that, I will turn the call over to Jumi to further discuss our third quarter results and outlook for the fourth quarter and full year 2023.